Labeling and Advertising of Home Insulation, 19936-19939 [2016-07679]

Download as PDF 19936 Federal Register / Vol. 81, No. 66 / Wednesday, April 6, 2016 / Proposed Rules recent legislative action made under the RISE Act and will implement new agency policies regarding the expansion of the definition of mitigation as it pertains to the Disaster Loan Program, and the inclusion of malfeasance. List of Subjects in 13 CFR Part 123 Disaster assistance, Loan programsbusiness, Reporting and recordkeeping requirements, Small businesses. For reasons set forth in the preamble, SBA proposes to amend 13 CFR part 123 as follows: PART 123—DISASTER LOAN PROGRAM 1. The authority citation for part 123 continues to read as follows: ■ Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 636(d), 657n; Pub. L. 102–395, 106 Stat. 1828, 1864; Pub. L. 103–75, 107 Stat. 739; and Pub. L. 106–50, 113 Stat. 245. 2. Amend § 123.2 by revising the seventh sentence to read as follows: ■ § 123.2 What are disaster loans and disaster declarations? * * * Sudden events that cause substantial economic injury may be disasters even if they do not cause physical damage to a victim’s property. * * * ■ 3. Amend § 123.3 by revising paragraph (a)(1) to read as follows: § 123.3 How are disaster declarations made? asabaliauskas on DSK3SPTVN1PROD with PROPOSALS § 123.11 Does SBA require collateral for any of its disaster loans? (a) * * * (2) Physical disaster home and physical disaster business loans. Generally, SBA will not require that you pledge collateral to secure a physical disaster home or physical disaster business loan of $25,000 or less. This authority expires on November 25, 2018, unless extended by statute. * * * * * [Amended] 5. Amend § 123.13 by removing the parenthetical phrase ‘‘(OMB Approval No. 3245–0122.)’’ from paragraph (a). ■ 6. Amend § 123.18 by: ■ a. Redesignating the undesignated text as paragraph (a); ■ VerDate Sep<11>2014 18:03 Apr 05, 2016 Jkt 238001 § 123.18 Can I request an increase in the amount of a physical disaster loan? (a) Generally, SBA will consider your request for an increase in your loan if you can show that the eligible cost of repair or replacement of damages increased because of events occurring after the loan approval that were beyond your control.* * * (b) For all disasters occurring on or after November 25, 2015, you may also request an increase in your loan if you suffered substantial economic damage or substantial risks to health or safety as a result of malfeasance in connection with the repair or replacement of real property or business machinery and equipment for which SBA made a disaster loan. See § 123.105 for limits on home loan amounts and § 123.202 for limits on business loan amounts. Malfeasance may include, but is not limited to, nonperformance of all or any portion of the work for which a contractor was paid, work that does not meet acceptable standards, or use of substandard materials. ■ 7. Amend § 123.20 by redesignating the undesignated text as paragraph (a) and adding paragraph (b) to read as follows: § 123.20 How long do I have to request an increase in the amount of a physical disaster loan or an economic injury loan? (a) * * * (1) The President declares a Major Disaster and authorizes Federal Assistance, including individual assistance (Assistance to Individuals and Households Program). * * * * * 4. Amend § 123.11 by revising paragraph (a)(2) to read as follows: § 123.13 b. Revising the first sentence of the redesignated paragraph (a); and ■ c. Adding paragraph (b). The revisions and additions read as follows: ■ (a) * * * (b) For physical disaster loan increases requested under § 123.18(b) as a result of malfeasance, the request must be received not later than two years after the date of final disbursement. ■ 8. Amend § 123.21 by revising the first and third sentences to read as follows: § 123.21 What is a mitigation measure? A mitigation measure is something done for the purpose of protecting property and occupants against disaster related damage.* * * Examples of mitigation measures include building retaining walls, sea walls, grading and contouring land, elevating flood prone structures, relocating utilities, constructing a safe room or similar storm shelter (if such safe room or similar storm shelter is constructed in accordance with applicable standards issued by the Federal Emergency Management Agency), or retrofitting structures to protect against high winds, earthquakes, flood, wildfires, or other physical disasters.* * * ■ 9. Amend § 123.105 by: PO 00000 Frm 00005 Fmt 4702 Sfmt 4702 a. Revising paragraph (a) introductory text; ■ b. Removing the word ‘‘and’’ from paragraph (a)(3); ■ c. Revising paragraph (a)(4); and ■ d. Adding paragraph (a)(5). The revisions and additions read as follows: ■ § 123.105 How much can I borrow with a home disaster loan and what limits apply on use of funds and repayment terms? (a) There are limits on how much money you can borrow for particular purposes: * * * * * (4) 20 percent of the verified loss (not including refinancing or malfeasance), before deduction of compensation from other sources, up to a maximum of $200,000 for post-disaster mitigation (see § 123.107); and (5) $200,000 for eligible malfeasance, pursuant to § 123.18. * * * * * Dated: March 30, 2016. Maria Contreras-Sweet, Administrator. [FR Doc. 2016–07750 Filed 4–5–16; 8:45 am] BILLING CODE 8025–01–P FEDERAL TRADE COMMISSION 16 CFR Part 460 RIN 3084–AB40 Labeling and Advertising of Home Insulation Federal Trade Commission (‘‘FTC’’ or ‘‘Commission’’). ACTION: Advance notice of proposed rulemaking; request for public comment. AGENCY: As part of the Commission’s systematic review of all current FTC rules and guides, the Commission requests public comment on the overall costs, benefits, necessity, and regulatory and economic impact of the FTC’s ‘‘Trade Regulation Rule Concerning the Labeling and Advertising of Home Insulation’’ (the ‘‘R-value Rule’’ or ‘‘Rule’’). SUMMARY: Comments must be received on or before June 6, 2016. ADDRESSES: Interested parties may file a comment online or on paper, by following the instructions in the Request for Comment part of the SUPPLEMENTARY INFORMATION section below. Write: ‘‘16 CFR part 460—Rvalue Rule Review, File No. R811001’’ on your comment, and file your comment online at https:// DATES: E:\FR\FM\06APP1.SGM 06APP1 Federal Register / Vol. 81, No. 66 / Wednesday, April 6, 2016 / Proposed Rules asabaliauskas on DSK3SPTVN1PROD with PROPOSALS ftcpublic.commentworks.com/ftc/ rvaluerule by following the instructions on the web-based form. If you prefer to file your comment on paper, write ‘‘16 CFR part 460—R-value Rule Review, Matter No. R811001’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex B), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex B), Washington, DC 20024. FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326–2889, Attorney, Division of Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 20580. SUPPLEMENTARY INFORMATION: I. Background Thermal insulation is an important energy-savings product that reduces consumers’ heating and cooling costs and increases their home energy efficiency. The Commission promulgated the R-value Rule, found at 16 CFR part 460 (‘‘the current Rule’’ or ‘‘the current R-value Rule’’), in 1979 to address the failure of the home insulation marketplace to provide essential pre-purchase information to consumers, primarily an insulation product’s ‘‘R-value.’’ 1 An insulation product’s ‘‘R-value’’ rates the product’s ability to restrict heat flow and, therefore, reduce energy costs. The higher the R-value, the better the product’s insulating ability. R-value ratings vary among different types and forms of home insulations and even among products of the same type and form. The FTC’s current R-value Rule provides substantiation and disclosure requirements for insulation products used in the residential market and prohibits certain claims unless they are true. Specifically, the current Rule requires insulation sellers to disclose the insulation product’s R-value and related information for their products based on uniform, industry-adopted test procedures.2 This information enables 1 The Commission promulgated the current Rvalue Rule pursuant to section 18 of the Federal Trade Commission Act (‘‘FTC Act’’), 15 U.S.C. 57a. The current Rule became effective on September 30, 1980. See 44 FR 50218 (Aug. 27, 1979). 2 Additional Commission rules or guides may also apply to home insulation sellers. For example, the Commission’s rules concerning Disclosure of Written Consumer Product Warranty Terms and Conditions, and the Pre-sale Availability of Written VerDate Sep<11>2014 18:03 Apr 05, 2016 Jkt 238001 19937 consumers to evaluate the performance and cost effectiveness of competing insulation products. other sellers who base their R-value claims on these test results. A. Products Covered The R-value Rule covers all ‘‘home insulation products.’’ Under the current Rule, the term ‘‘insulation’’ includes any product ‘‘mainly used to slow down heat flow’’ from, for example, a heated interior through exterior walls to the outside.3 The current Rule covers most types or forms of insulation marketed for use in residential structures, whether or not the Rule specifically refers to such insulation.4 It does not cover insulation sold for use in commercial (including industrial) buildings. In addition, it generally does not apply to non-insulation products with insulating characteristics, such as storm windows or storm doors. Home insulation falls into two basic categories: ‘‘mass’’ and ‘‘reflective.’’ Mass insulations reduce heat transfer by conduction (through the insulation’s mass), convection (air movement within, and through, the air spaces inside the insulation), and radiation. Reflective insulations (primarily aluminum foils) reduce heat transfer when installed facing an airspace. Within these basic categories, home insulation is sold in various types or materials (e.g., fiberglass, cellulose, polyurethane, aluminum foil) and forms (e.g., batt, dry-applied loose-fill, sprayapplied, board stock, multi-sheet reflective). The Commission first issued the current R-value Rule in response to a variety of unfair or deceptive acts or practices in the insulation industry. Specifically, the Commission found that many sellers: (1) Failed to disclose Rvalues, impeding informed purchasing decisions and misleading consumers who based their purchases on price or thickness alone; (2) exaggerated R-value disclosures and often failed to account for material factors (e.g., aging, settling) that reduce thermal performance; (3) failed to inform consumers about Rvalue’s meaning and importance; (4) exaggerated fuel bill savings and often did not disclose that savings vary depending on consumers’ particular circumstances; or (5) falsely claimed that consumers’ insulation purchases would qualify for tax credits, or that products had been ‘‘certified’’ or ‘‘favored’’ by Federal agencies.5 B. Covered Parties The current Rule applies to home insulation manufacturers, professional installers, retailers who sell insulation to consumers for do-it-yourself installation, and new home sellers, including sellers of manufactured housing. It also applies to testing laboratories that conduct R-value tests for home insulation manufacturers or Warranty Terms, 16 CFR parts 701 and 702, specify warranty requirements; and the Commission’s Guides for the Use of Environmental Marketing Claims, 16 CFR part 260, address the application of section 5 of the FTC Act, 15 U.S.C. 45, to environmental advertising and marketing claims (e.g., recycled material claims). Further, section 5 declares that unfair or deceptive acts or practices are unlawful, and requires that advertisers and other sellers have a reasonable basis for advertising and other promotional claims before they are disseminated. See Deception Policy Statement, appended to Cliffdale Assoc., Inc., 103 FTC 110, 174 (1984); and FTC Policy Statement on Unfairness, appended to International Harvester Co., 104 F.T.C. 949 (1984); and Policy Statement Regarding Advertising Substantiation, 49 FR 30999 (Aug. 2, 1984), reprinted in Thompson Medical Co., 104 F.T.C. 839 (1984). 3 See 16 CFR 460.2. 4 16 CFR part 460 does not cover pipe insulation or any type of duct insulation except for duct wrap. PO 00000 Frm 00006 Fmt 4702 Sfmt 4702 C. The Rule’s Basis D. The Rule’s Requirements The current Rule requires manufacturers and others who sell home insulation to disclose R-value and related information (e.g., thickness, coverage area per package) on package labels and manufacturers’ fact sheets. Rvalue disclosures must be derived from tests conducted according to one of four specified American Society of Testing and Materials (‘‘ASTM’’) test procedures that measure thermal performance under ‘‘steady-state’’ (i.e., static) conditions.6 For mass insulations, the required tests include ASTM C–177, C– 236, C–518, and C–976.7 Industry members must conduct tests for mass insulation products on the insulation material alone (excluding any airspace) at a mean temperature of 75 °F. The current Rule requires testing for reflective insulation products according to either ASTM C 236–89 (1993) or ASTM C 976–90, which generate Rvalues for insulation systems (such as those that include one or more air spaces).8 The current Rule’s R-value 5 44 FR at 50222–24 (Aug. 27, 1979). current Rule incorporates by reference ASTM’s test procedures, which ASTM reviews and revises periodically. Under § 460.7 of the Rule, the Commission will accept, but not require, the use of a revised version of any of these standards 90 days after ASTM adopts and publishes the revision. The Commission may, however, reopen the rulemaking proceeding during the 90-day period, or at any later time, to consider whether it should require use of the revised procedure or reject it under § 460.5. 7 44 FR 50218, at 50226, n. 189. 8 The R-value of a single-sheet reflective insulation product must be tested under ASTM 6 The E:\FR\FM\06APP1.SGM Continued 06APP1 19938 Federal Register / Vol. 81, No. 66 / Wednesday, April 6, 2016 / Proposed Rules tests account for certain factors that can affect insulation’s thermal performance. For example, the current Rule’s R-value tests for polyurethane, polyisocyanurate, and extruded polystyrene insulation account for aging, and the required tests for loosefill insulation products reflect the effect of settling on R-values.9 The current Rule also requires specific disclosures on manufacturer product labels and fact sheets, installer receipts, and new home seller contracts. For example, insulation labels must display, among other things, the product’s R-value and the statement ‘‘R means resistance to heat flow. The higher the R-value, the greater the insulating power.’’ 10 The current Rule also requires that certain affirmative disclosures appear in advertising and other promotional materials (including those on the Internet) that contain an Rvalue, price, thickness, or energy-saving claim, or compare one type of insulation to another. For example, if an advertisement contains an R-value, it must disclose the type of insulation being sold and the thickness needed to get that R-value, as well as the statement: ‘‘The higher the R-value, the greater the insulating power. Ask your seller for the fact sheet on R-values.’’ In addition, if an advertisement contains an energy saving claim, it must disclose: ‘‘Savings vary. Find out why in the seller’s fact sheet on R-values. Higher Rvalues mean greater insulating power.’’ 11 II. Regulatory Review Program asabaliauskas on DSK3SPTVN1PROD with PROPOSALS The Commission reviews its rules and guides periodically to seek information about their costs and benefits, regulatory and economic impact, and general effectiveness in protecting consumers and helping industry avoid deceptive claims. These reviews assist the Commission in identifying rules and guides that warrant modification or rescission. As part of its last review in 2005, the Commission issued several E408 or another test method that provides comparable results. 9 44 FR at 50219–20, 50227–28 (Aug. 27, 1979). 10 16 CFR 460.12(c). 11 The current Rule requires manufacturers and other sellers to have a ‘‘reasonable basis’’ for any energy-saving claims they make. 16 CFR 460.19. Although the current Rule does not specify how they must substantiate such claims, the Commission explained when issuing the Rule that scientifically reliable measurements of fuel use in actual houses, or reliable computer models or methods of heat flow calculations, would meet the reasonable basis standard. 44 FR at 50233–34 (Aug. 27, 1979). Sellers other than manufacturers can rely on the manufacturer’s claims unless they know, or should know, that the manufacturer lacks a reasonable basis for the claims. VerDate Sep<11>2014 17:24 Apr 05, 2016 Jkt 238001 amendments to update and improve the Rule.12 With this document, the Commission initiates a new review. The Commission solicits comments on, among other things, the economic impact of, and the continuing need for, the R-value Rule; the Rule’s benefits to consumers; and the burdens it places on industry members subject to the requirements, including small businesses. III. Issues for Comments To aid commenters in submitting information, the Commission has prepared the following specific questions related to the R-value Rule. The Commission seeks comments on these and any other issues related to the Rule’s current requirements. In their replies, commenters should provide any available evidence that supports their position. A. General Regulatory Review Questions (1) Need: Is there a continuing need for the Rule? Why or why not? (2) Benefits and Costs to Consumers: What benefits has the Rule provided to consumers, and does the Rule impose any significant costs on consumers? (3) Benefits and Costs to Industry Members: What benefits, if any, has the Rule provided to businesses, and does the Rule impose any significant costs, including costs of compliance, on businesses, including small businesses? (4) Recommended Changes: What modifications, if any, should the Commission make to the Rule to increase its benefits or reduce its costs? How would these modifications affect the costs and benefits of the Rule for consumers? How would these modifications affect the costs and benefits of the Rule for businesses, particularly small businesses? (5) Impact on Information: What impact has the Rule had on the flow of truthful information to consumers and on the flow of deceptive information to consumers? (6) Compliance: Provide any evidence concerning the degree of industry compliance with the Rule. Does this evidence indicate that the Rule should be modified? If so, why, and how? If not, why not? (7) Unnecessary Provisions: Provide any evidence concerning whether any of the Rule’s provisions are no longer necessary. Explain why these provisions are unnecessary. (8) Additional Unfair or Deceptive Practices: What potentially unfair or deceptive practices, not covered by the Rule, related to insulation products are 12 70 PO 00000 FR 31258 (May 31, 2005). Frm 00007 Fmt 4702 Sfmt 4702 occurring in the marketplace? Are such practices prevalent in the market? If so, please describe such practices, including their impact on consumers. Provide any evidence, such as empirical data, consumer perception studies, or consumer complaints, that demonstrates the extent of such practices. Provide any evidence that demonstrates whether such practices cause consumer injury. With reference to such practices, should the Rule be modified? If so, why, and how? If not, why not? (9) Product Coverage: Should the Commission broaden the Rule to include products not currently covered? Provide any evidence that supports your position. What potentially unfair or deceptive practices related to products not covered by the Rule are occurring in the marketplace? Are such practices prevalent in the market? If so, please describe such practices, including their impact on consumers. Provide any evidence, such as empirical data, consumer perception studies, or consumer complaints, that demonstrates the extent of such practices. Provide any evidence that demonstrates whether such practices cause consumer injury. (10) Technological or Economic Changes: What modifications, if any, should be made to the Rule to account for current or impending changes in technology or economic conditions? How would these modifications affect the costs and benefits of the Rule for consumers and businesses, particularly small businesses? (11) Conflicts With Other Requirements: Does the Rule overlap or conflict with other Federal, State, or local laws or regulations? If so, how? Provide any evidence that supports your position. With reference to the asserted conflicts, should the Rule be modified? If so, why, and how? If not, why not? Are there any Rule changes necessary to help state law enforcement agencies combat deceptive practices in the insulation market? Provide any evidence concerning whether the Rule has assisted in promoting national consistency with respect to the advertising of insulation products. B. Specific Questions Related to the R-Value Rule (1) Aging of Cellular Plastics: Should the Commission update the required test procedures for the aging of cellular plastic insulations under 460.5(a)(1) to ensure consistency among R-value claims and to otherwise prevent deception? Specifically, should the Commission amend the Rule to require ASTM 1303 (‘‘Standard Test Method for Predicting Long-Term Thermal Resistance of Closed-Cell Foam E:\FR\FM\06APP1.SGM 06APP1 Federal Register / Vol. 81, No. 66 / Wednesday, April 6, 2016 / Proposed Rules Insulation’’) or a different test? If so, to which products should this test apply? 13 (2) Affirmative Disclosures: Should the Commission consider changing, adding, or removing affirmative disclosures required by the Rule for labeling and advertising related to mass insulation, reflective insulation, or radiant barriers? (3) Foam Insulation: Given the significant increase in the use of foam insulation products since the last Rule review, should the Commission consider any Rule changes to help prevent deception in the marketing of such products, or reduce unnecessary burdens on sellers? (4) Testing Requirements: Should the Commission consider any changes to the testing provisions in the Rule? Such potential changes include, but are not limited to, test updates, the addition of new or existing tests not currently referenced in the Rule, or changes to other testing-related requirement such as the Rule’s ‘‘tolerance’’ provision (§ 460.8).14 Are there any tests currently referenced in the Rule that should be removed? IV. Comment Submissions asabaliauskas on DSK3SPTVN1PROD with PROPOSALS You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before June 6, 2016. Write ‘‘16 CFR part 460—R-value Rule Review, File No. R811001’’ on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http:// www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals’ home contact information from 13 Certain types of cellular plastics insulations (e.g., polyurethane, polyisocyanurate, and extruded polystyrene boardstock insulations) contain a gas other than normal air in the product’s voids (i.e., small spaces or bubbles throughout the material). Such gas gives the product an initial R-value that is higher than it would have if the voids contained normal air. However, the R-value for these insulations decreases over time as the gas escapes the material and is replaced by normal air. The current Rule addresses this aging process by requiring that R-value tests be performed on specimens that ‘‘fully reflect the effect of aging on the product’s R-value.’’ Section 460.5(a)(1) of the Rule accepts the use of the ‘‘accelerated aging’’ procedure in General Services Administration (‘‘GSA’’) Purchase Specification HH–I–530A (which was in effect at the time the Commission promulgated the Rule) as a permissible ‘‘safe harbor’’ procedure, but also allows manufacturers to use ‘‘another reliable procedure.’’ 14 The tolerance provision (§ 460.8) states that no individual specimen of the insulation an industry member sells can have an R-value more than 10% below the R-value shown on the product’s label. VerDate Sep<11>2014 17:24 Apr 05, 2016 Jkt 238001 comments before placing them on the Commission Web site. Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, such as anyone’s Social Security number, date of birth, driver’s license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any ‘‘[t]rade secret or any commercial or financial information which is . . . privileged or confidential,’’ as discussed in section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). In particular, do not include competitively sensitive information such as costs, sales statistics, inventories, formulas, patterns, devices, manufacturing processes, or customer names. If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept confidential only if the FTC General Counsel grants your request in accordance with the law and the public interest. Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online, or send them to the Commission by courier or overnight service. To make sure that the Commission considers your online comment, you must file it at https:// ftcpublic.commentworks.com/ftc/rvaluereview, by following the instruction on the web-based form. If this Notice appears at http:// www.regulations.gov, you also may file a comment through that Web site. If you prefer to file your comment on paper, write ‘‘16 CFR part 460—R-value Rule Review, File No. R811001’’ on your comment and on the envelope, and mail your comment to the following address: Federal Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite CC–5610 (Annex B), Washington, DC 20580, or deliver your comment to the following address: Federal Trade Commission, Office of the Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex B), Washington, DC 20024. If PO 00000 Frm 00008 Fmt 4702 Sfmt 4702 19939 possible, submit your paper comment to the Commission by courier or overnight service. Visit the Commission Web site at http://www.ftc.gov to read this ANPR and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding, as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before June 6, 2016. For information on the Commission’s privacy policy, including routine uses permitted by the Privacy Act, see http://www.ftc.gov/ftc/ privacy.htm. By direction of the Commission. Donald S. Clark, Secretary. [FR Doc. 2016–07679 Filed 4–5–16; 8:45 am] BILLING CODE 6750–01–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 100 [Docket Number USCG–2016–0011] RIN 1625–AA08 Special Local Regulation; Bucksport/ Southeastern Drag Boat Summer Championships, Atlantic Intracoastal Waterway; Bucksport, SC Coast Guard, DHS. Notice of proposed rulemaking. AGENCY: ACTION: The Coast Guard proposes to establish a special local regulation on the Atlantic Intracoastal Waterway in Bucksport, South Carolina during the Bucksport/Southeastern Drag Boat Summer Championships, on August 13, and August 14, 2016. This special local regulation is necessary to ensure the safety of participants, spectators, and the general public during the event. This proposed rulemaking would prohibit persons and vessels from being in the regulated area unless authorized by the Captain of the Port Charleston or a designated representative. We invite your comments on this proposed rulemaking. SUMMARY: Comments and related material must be received by the Coast Guard on or before May 6, 2016. ADDRESSES: You may submit comments identified by docket number USCG– 2016–0011 using the Federal eRulemaking Portal at http:// www.regulations.gov. See the ‘‘Public DATES: E:\FR\FM\06APP1.SGM 06APP1

Agencies

[Federal Register Volume 81, Number 66 (Wednesday, April 6, 2016)]
[Proposed Rules]
[Pages 19936-19939]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-07679]


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FEDERAL TRADE COMMISSION

16 CFR Part 460

RIN 3084-AB40


Labeling and Advertising of Home Insulation

AGENCY: Federal Trade Commission (``FTC'' or ``Commission'').

ACTION: Advance notice of proposed rulemaking; request for public 
comment.

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SUMMARY: As part of the Commission's systematic review of all current 
FTC rules and guides, the Commission requests public comment on the 
overall costs, benefits, necessity, and regulatory and economic impact 
of the FTC's ``Trade Regulation Rule Concerning the Labeling and 
Advertising of Home Insulation'' (the ``R-value Rule'' or ``Rule'').

DATES: Comments must be received on or before June 6, 2016.

ADDRESSES: Interested parties may file a comment online or on paper, by 
following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write: ``16 CFR part 460--R-
value Rule Review, File No. R811001'' on your comment, and file your 
comment online at https://

[[Page 19937]]

ftcpublic.commentworks.com/ftc/rvaluerule by following the instructions 
on the web-based form. If you prefer to file your comment on paper, 
write ``16 CFR part 460--R-value Rule Review, Matter No. R811001'' on 
your comment and on the envelope, and mail your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
600 Pennsylvania Avenue NW., Suite CC-5610 (Annex B), Washington, DC 
20580, or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex B), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Hampton Newsome, (202) 326-2889, 
Attorney, Division of Enforcement, Bureau of Consumer Protection, 
Federal Trade Commission, 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: 

I. Background

    Thermal insulation is an important energy-savings product that 
reduces consumers' heating and cooling costs and increases their home 
energy efficiency. The Commission promulgated the R-value Rule, found 
at 16 CFR part 460 (``the current Rule'' or ``the current R-value 
Rule''), in 1979 to address the failure of the home insulation 
marketplace to provide essential pre-purchase information to consumers, 
primarily an insulation product's ``R-value.'' \1\ An insulation 
product's ``R-value'' rates the product's ability to restrict heat flow 
and, therefore, reduce energy costs. The higher the R-value, the better 
the product's insulating ability. R-value ratings vary among different 
types and forms of home insulations and even among products of the same 
type and form.
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    \1\ The Commission promulgated the current R-value Rule pursuant 
to section 18 of the Federal Trade Commission Act (``FTC Act''), 15 
U.S.C. 57a. The current Rule became effective on September 30, 1980. 
See 44 FR 50218 (Aug. 27, 1979).
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    The FTC's current R-value Rule provides substantiation and 
disclosure requirements for insulation products used in the residential 
market and prohibits certain claims unless they are true. Specifically, 
the current Rule requires insulation sellers to disclose the insulation 
product's R-value and related information for their products based on 
uniform, industry-adopted test procedures.\2\ This information enables 
consumers to evaluate the performance and cost effectiveness of 
competing insulation products.
---------------------------------------------------------------------------

    \2\ Additional Commission rules or guides may also apply to home 
insulation sellers. For example, the Commission's rules concerning 
Disclosure of Written Consumer Product Warranty Terms and 
Conditions, and the Pre-sale Availability of Written Warranty Terms, 
16 CFR parts 701 and 702, specify warranty requirements; and the 
Commission's Guides for the Use of Environmental Marketing Claims, 
16 CFR part 260, address the application of section 5 of the FTC 
Act, 15 U.S.C. 45, to environmental advertising and marketing claims 
(e.g., recycled material claims). Further, section 5 declares that 
unfair or deceptive acts or practices are unlawful, and requires 
that advertisers and other sellers have a reasonable basis for 
advertising and other promotional claims before they are 
disseminated. See Deception Policy Statement, appended to Cliffdale 
Assoc., Inc., 103 FTC 110, 174 (1984); and FTC Policy Statement on 
Unfairness, appended to International Harvester Co., 104 F.T.C. 949 
(1984); and Policy Statement Regarding Advertising Substantiation, 
49 FR 30999 (Aug. 2, 1984), reprinted in Thompson Medical Co., 104 
F.T.C. 839 (1984).
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A. Products Covered

    The R-value Rule covers all ``home insulation products.'' Under the 
current Rule, the term ``insulation'' includes any product ``mainly 
used to slow down heat flow'' from, for example, a heated interior 
through exterior walls to the outside.\3\ The current Rule covers most 
types or forms of insulation marketed for use in residential 
structures, whether or not the Rule specifically refers to such 
insulation.\4\ It does not cover insulation sold for use in commercial 
(including industrial) buildings. In addition, it generally does not 
apply to non-insulation products with insulating characteristics, such 
as storm windows or storm doors.
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    \3\ See 16 CFR 460.2.
    \4\ 16 CFR part 460 does not cover pipe insulation or any type 
of duct insulation except for duct wrap.
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    Home insulation falls into two basic categories: ``mass'' and 
``reflective.'' Mass insulations reduce heat transfer by conduction 
(through the insulation's mass), convection (air movement within, and 
through, the air spaces inside the insulation), and radiation. 
Reflective insulations (primarily aluminum foils) reduce heat transfer 
when installed facing an airspace. Within these basic categories, home 
insulation is sold in various types or materials (e.g., fiberglass, 
cellulose, polyurethane, aluminum foil) and forms (e.g., batt, dry-
applied loose-fill, spray-applied, board stock, multi-sheet 
reflective).

B. Covered Parties

    The current Rule applies to home insulation manufacturers, 
professional installers, retailers who sell insulation to consumers for 
do-it-yourself installation, and new home sellers, including sellers of 
manufactured housing. It also applies to testing laboratories that 
conduct R-value tests for home insulation manufacturers or other 
sellers who base their R-value claims on these test results.

C. The Rule's Basis

    The Commission first issued the current R-value Rule in response to 
a variety of unfair or deceptive acts or practices in the insulation 
industry. Specifically, the Commission found that many sellers: (1) 
Failed to disclose R-values, impeding informed purchasing decisions and 
misleading consumers who based their purchases on price or thickness 
alone; (2) exaggerated R-value disclosures and often failed to account 
for material factors (e.g., aging, settling) that reduce thermal 
performance; (3) failed to inform consumers about R-value's meaning and 
importance; (4) exaggerated fuel bill savings and often did not 
disclose that savings vary depending on consumers' particular 
circumstances; or (5) falsely claimed that consumers' insulation 
purchases would qualify for tax credits, or that products had been 
``certified'' or ``favored'' by Federal agencies.\5\
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    \5\ 44 FR at 50222-24 (Aug. 27, 1979).
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D. The Rule's Requirements

    The current Rule requires manufacturers and others who sell home 
insulation to disclose R-value and related information (e.g., 
thickness, coverage area per package) on package labels and 
manufacturers' fact sheets. R-value disclosures must be derived from 
tests conducted according to one of four specified American Society of 
Testing and Materials (``ASTM'') test procedures that measure thermal 
performance under ``steady-state'' (i.e., static) conditions.\6\ For 
mass insulations, the required tests include ASTM C-177, C-236, C-518, 
and C-976.\7\ Industry members must conduct tests for mass insulation 
products on the insulation material alone (excluding any airspace) at a 
mean temperature of 75 [deg]F. The current Rule requires testing for 
reflective insulation products according to either ASTM C 236-89 (1993) 
or ASTM C 976-90, which generate R-values for insulation systems (such 
as those that include one or more air spaces).\8\ The current Rule's R-
value

[[Page 19938]]

tests account for certain factors that can affect insulation's thermal 
performance. For example, the current Rule's R-value tests for 
polyurethane, polyisocyanurate, and extruded polystyrene insulation 
account for aging, and the required tests for loose-fill insulation 
products reflect the effect of settling on R-values.\9\
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    \6\ The current Rule incorporates by reference ASTM's test 
procedures, which ASTM reviews and revises periodically. Under Sec.  
460.7 of the Rule, the Commission will accept, but not require, the 
use of a revised version of any of these standards 90 days after 
ASTM adopts and publishes the revision. The Commission may, however, 
reopen the rulemaking proceeding during the 90-day period, or at any 
later time, to consider whether it should require use of the revised 
procedure or reject it under Sec.  460.5.
    \7\ 44 FR 50218, at 50226, n. 189.
    \8\ The R-value of a single-sheet reflective insulation product 
must be tested under ASTM E408 or another test method that provides 
comparable results.
    \9\ 44 FR at 50219-20, 50227-28 (Aug. 27, 1979).
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    The current Rule also requires specific disclosures on manufacturer 
product labels and fact sheets, installer receipts, and new home seller 
contracts. For example, insulation labels must display, among other 
things, the product's R-value and the statement ``R means resistance to 
heat flow. The higher the R-value, the greater the insulating power.'' 
\10\ The current Rule also requires that certain affirmative 
disclosures appear in advertising and other promotional materials 
(including those on the Internet) that contain an R-value, price, 
thickness, or energy-saving claim, or compare one type of insulation to 
another. For example, if an advertisement contains an R-value, it must 
disclose the type of insulation being sold and the thickness needed to 
get that R-value, as well as the statement: ``The higher the R-value, 
the greater the insulating power. Ask your seller for the fact sheet on 
R-values.'' In addition, if an advertisement contains an energy saving 
claim, it must disclose: ``Savings vary. Find out why in the seller's 
fact sheet on R-values. Higher R-values mean greater insulating 
power.'' \11\
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    \10\ 16 CFR 460.12(c).
    \11\ The current Rule requires manufacturers and other sellers 
to have a ``reasonable basis'' for any energy-saving claims they 
make. 16 CFR 460.19. Although the current Rule does not specify how 
they must substantiate such claims, the Commission explained when 
issuing the Rule that scientifically reliable measurements of fuel 
use in actual houses, or reliable computer models or methods of heat 
flow calculations, would meet the reasonable basis standard. 44 FR 
at 50233-34 (Aug. 27, 1979). Sellers other than manufacturers can 
rely on the manufacturer's claims unless they know, or should know, 
that the manufacturer lacks a reasonable basis for the claims.
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II. Regulatory Review Program

    The Commission reviews its rules and guides periodically to seek 
information about their costs and benefits, regulatory and economic 
impact, and general effectiveness in protecting consumers and helping 
industry avoid deceptive claims. These reviews assist the Commission in 
identifying rules and guides that warrant modification or rescission. 
As part of its last review in 2005, the Commission issued several 
amendments to update and improve the Rule.\12\
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    \12\ 70 FR 31258 (May 31, 2005).
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    With this document, the Commission initiates a new review. The 
Commission solicits comments on, among other things, the economic 
impact of, and the continuing need for, the R-value Rule; the Rule's 
benefits to consumers; and the burdens it places on industry members 
subject to the requirements, including small businesses.

III. Issues for Comments

    To aid commenters in submitting information, the Commission has 
prepared the following specific questions related to the R-value Rule. 
The Commission seeks comments on these and any other issues related to 
the Rule's current requirements. In their replies, commenters should 
provide any available evidence that supports their position.

A. General Regulatory Review Questions

    (1) Need: Is there a continuing need for the Rule? Why or why not?
    (2) Benefits and Costs to Consumers: What benefits has the Rule 
provided to consumers, and does the Rule impose any significant costs 
on consumers?
    (3) Benefits and Costs to Industry Members: What benefits, if any, 
has the Rule provided to businesses, and does the Rule impose any 
significant costs, including costs of compliance, on businesses, 
including small businesses?
    (4) Recommended Changes: What modifications, if any, should the 
Commission make to the Rule to increase its benefits or reduce its 
costs? How would these modifications affect the costs and benefits of 
the Rule for consumers? How would these modifications affect the costs 
and benefits of the Rule for businesses, particularly small businesses?
    (5) Impact on Information: What impact has the Rule had on the flow 
of truthful information to consumers and on the flow of deceptive 
information to consumers?
    (6) Compliance: Provide any evidence concerning the degree of 
industry compliance with the Rule. Does this evidence indicate that the 
Rule should be modified? If so, why, and how? If not, why not?
    (7) Unnecessary Provisions: Provide any evidence concerning whether 
any of the Rule's provisions are no longer necessary. Explain why these 
provisions are unnecessary.
    (8) Additional Unfair or Deceptive Practices: What potentially 
unfair or deceptive practices, not covered by the Rule, related to 
insulation products are occurring in the marketplace? Are such 
practices prevalent in the market? If so, please describe such 
practices, including their impact on consumers. Provide any evidence, 
such as empirical data, consumer perception studies, or consumer 
complaints, that demonstrates the extent of such practices. Provide any 
evidence that demonstrates whether such practices cause consumer 
injury. With reference to such practices, should the Rule be modified? 
If so, why, and how? If not, why not?
    (9) Product Coverage: Should the Commission broaden the Rule to 
include products not currently covered? Provide any evidence that 
supports your position. What potentially unfair or deceptive practices 
related to products not covered by the Rule are occurring in the 
marketplace? Are such practices prevalent in the market? If so, please 
describe such practices, including their impact on consumers. Provide 
any evidence, such as empirical data, consumer perception studies, or 
consumer complaints, that demonstrates the extent of such practices. 
Provide any evidence that demonstrates whether such practices cause 
consumer injury.
    (10) Technological or Economic Changes: What modifications, if any, 
should be made to the Rule to account for current or impending changes 
in technology or economic conditions? How would these modifications 
affect the costs and benefits of the Rule for consumers and businesses, 
particularly small businesses?
    (11) Conflicts With Other Requirements: Does the Rule overlap or 
conflict with other Federal, State, or local laws or regulations? If 
so, how? Provide any evidence that supports your position. With 
reference to the asserted conflicts, should the Rule be modified? If 
so, why, and how? If not, why not? Are there any Rule changes necessary 
to help state law enforcement agencies combat deceptive practices in 
the insulation market? Provide any evidence concerning whether the Rule 
has assisted in promoting national consistency with respect to the 
advertising of insulation products.

B. Specific Questions Related to the R-Value Rule

    (1) Aging of Cellular Plastics: Should the Commission update the 
required test procedures for the aging of cellular plastic insulations 
under 460.5(a)(1) to ensure consistency among R-value claims and to 
otherwise prevent deception? Specifically, should the Commission amend 
the Rule to require ASTM 1303 (``Standard Test Method for Predicting 
Long-Term Thermal Resistance of Closed-Cell Foam

[[Page 19939]]

Insulation'') or a different test? If so, to which products should this 
test apply? \13\
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    \13\ Certain types of cellular plastics insulations (e.g., 
polyurethane, polyisocyanurate, and extruded polystyrene boardstock 
insulations) contain a gas other than normal air in the product's 
voids (i.e., small spaces or bubbles throughout the material). Such 
gas gives the product an initial R-value that is higher than it 
would have if the voids contained normal air. However, the R-value 
for these insulations decreases over time as the gas escapes the 
material and is replaced by normal air.
    The current Rule addresses this aging process by requiring that 
R-value tests be performed on specimens that ``fully reflect the 
effect of aging on the product's R-value.'' Section 460.5(a)(1) of 
the Rule accepts the use of the ``accelerated aging'' procedure in 
General Services Administration (``GSA'') Purchase Specification HH-
I-530A (which was in effect at the time the Commission promulgated 
the Rule) as a permissible ``safe harbor'' procedure, but also 
allows manufacturers to use ``another reliable procedure.''
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    (2) Affirmative Disclosures: Should the Commission consider 
changing, adding, or removing affirmative disclosures required by the 
Rule for labeling and advertising related to mass insulation, 
reflective insulation, or radiant barriers?
    (3) Foam Insulation: Given the significant increase in the use of 
foam insulation products since the last Rule review, should the 
Commission consider any Rule changes to help prevent deception in the 
marketing of such products, or reduce unnecessary burdens on sellers?
    (4) Testing Requirements: Should the Commission consider any 
changes to the testing provisions in the Rule? Such potential changes 
include, but are not limited to, test updates, the addition of new or 
existing tests not currently referenced in the Rule, or changes to 
other testing-related requirement such as the Rule's ``tolerance'' 
provision (Sec.  460.8).\14\ Are there any tests currently referenced 
in the Rule that should be removed?
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    \14\ The tolerance provision (Sec.  460.8) states that no 
individual specimen of the insulation an industry member sells can 
have an R-value more than 10% below the R-value shown on the 
product's label.
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IV. Comment Submissions

    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before June 6, 2016. 
Write ``16 CFR part 460--R-value Rule Review, File No. R811001'' on 
your comment. Your comment--including your name and your state--will be 
placed on the public record of this proceeding, including, to the 
extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the 
Commission tries to remove individuals' home contact information from 
comments before placing them on the Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, such as anyone's Social Security 
number, date of birth, driver's license number or other state 
identification number or foreign country equivalent, passport number, 
financial account number, or credit or debit card number. You are also 
solely responsible for making sure that your comment does not include 
any sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which is . . . privileged or confidential,'' as discussed in section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c). Your comment will be kept 
confidential only if the FTC General Counsel grants your request in 
accordance with the law and the public interest.
    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online, or send them to the Commission by courier or 
overnight service. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/r-valuereview, by following the instruction on the web-based form. 
If this Notice appears at http://www.regulations.gov, you also may file 
a comment through that Web site.
    If you prefer to file your comment on paper, write ``16 CFR part 
460--R-value Rule Review, File No. R811001'' on your comment and on the 
envelope, and mail your comment to the following address: Federal Trade 
Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., Suite 
CC-5610 (Annex B), Washington, DC 20580, or deliver your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
Constitution Center, 400 7th Street SW., 5th Floor, Suite 5610 (Annex 
B), Washington, DC 20024. If possible, submit your paper comment to the 
Commission by courier or overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
ANPR and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding, as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before June 6, 2016. For information on the 
Commission's privacy policy, including routine uses permitted by the 
Privacy Act, see http://www.ftc.gov/ftc/privacy.htm.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2016-07679 Filed 4-5-16; 8:45 am]
 BILLING CODE 6750-01-P